(PRLEAP.COM) Executives at Debt Shield, a Maryland-based debt settlement firm, expect more consumers to consider debt settlement as an alternative to bankruptcy because of IRS crackdowns on non-profit credit counseling agencies, the new bankruptcy law and continued inflation in energy that is met with stagnating incomes.
“ As the credit counseling industry continues to go through its troubles, I expect debt settlement to become a more attractive option for consumers and bank... ”
The bankruptcy law that went into effect last October requires consumers to obtain credit counseling prior to filing bankruptcy. However, access to credit counselors may become difficult as the IRS continues its crackdown of the consumer credit counseling industry. Last year, the IRS revoked the tax-exempt status of over 30 agencies that account for over half of the credit counseling market share.
“While the volume of bankruptcy petitions continue to pour into the court system, there is little doubt that the new law is making bankruptcy more cumbersome for consumers to file,” said Mark Baylis, president of Debt Shield. “As the credit counseling industry continues to go through its troubles, I expect debt settlement to become a more attractive option for consumers and banks.”
Baylis said that the IRS crackdowns and the tougher bankruptcy law are only part of the drive towards bankruptcy alternatives. He attributes the fact that inflation is outpacing income as another factor leading to debt resolution options outside the bankruptcy and credit counseling scenario and referred to recent government and non-government reports that paint a grim picture for Americans trying to get out of debt.
A report released in February by the Federal Reserve stated that the average household income after inflation fell 2.3 percent from 2001 to 2004. A report by the National Association of Consumer Bankruptcy Attorneys revealed that over 95 percent of pre-bankruptcy credit counseling clients could not afford to repay their debts and most of them fell into financial trouble because of illness, unemployment, divorce or other situation beyond their control. According to GasBuddy.com, average gasoline prices in America continue to hover around $2.50 per gallon, compared to a little over $2 on average last year.
“If we want our economy to be strong, then we need those who participate in the economy on all levels to be financially well,” Baylis continued. “Debt settlement is one legitimate option for helping consumers get back on their feet while also helping creditors recoup a portion of the profit they would otherwise lose if their customer filed bankruptcy.”
About Debt Shield, Inc.
Debt Shield, Inc., is a debt settlement company dedicated to helping consumers resolve their unsecured debt through mutually agreeable and discounted lump sum settlements in consideration of legitimate financial hardships. By helping consumers avoid bankruptcy, Debt Shield provides a service for both debtors and creditors. For more information about Debt Shield, call 1-888-397-7546 or visit the website at
www.debtshield.com.
